This study proposes an inventory model under a situation in which the supplier provides the purchaser a permissible delay of payments if the purchaser orders a large quantity. Shortages are not allowed and the effect of the inflation rate, deterioration rate and delay in payment are discussed as well. As a result, in this paper, we establish an EOQ model for deteriorating items under inflation when the supplier offers a permissible delay to the purchaser if the order quantity is greater than or equal to a predetermined quantity. We then characterize the optimal solution and provide an easy-to-use algorithm to find the optimal order quantity and replenishment time. Finally, some numerical examples are given to illustrate the theoretical results and made the sensitivity analysis of parameters on the optimal solutions.
Relation:
International Journal of Production Economics 88(3), pp.307-316
